Worker's Participation in Management

WORKERS’ PARTICIPATION IN WORKERS’ PARTICIPATION IN MANAGEMENTMANAGEMENT

Emergence of the concept

Threats from emerging centers of countervailing Threats from emerging centers of countervailing power particularly organized labour; Early 19power particularly organized labour; Early 19thth century in Europecentury in Europe

Demands of continuous production during War Demands of continuous production during War years;years;

Awareness of the results of the experiments Awareness of the results of the experiments carried out by industrial psychologist (Blake, carried out by industrial psychologist (Blake, Mayo, Lewin) Hawthorne ExperimentMayo, Lewin) Hawthorne Experiment

Emergence of the concept (Contd.)

A genuine understanding, recognition and A genuine understanding, recognition and acceptance by the employers of the role of acceptance by the employers of the role of workers in the industrial set up;workers in the industrial set up;

Emergence and growth of state Emergence and growth of state enterprises.enterprises.

MeaningMeaning

“…“…..a process whereby employees, ..a process whereby employees, either by themselves or through their either by themselves or through their trade union representatives, influence trade union representatives, influence decisions which management would decisions which management would otherwise have taken by itself…..”otherwise have taken by itself…..”

Meaning (Meaning (Contd.)

“ “ Participation refers to the formal Participation refers to the formal involvement of members in the involvement of members in the exercise of control, usually through exercise of control, usually through decision making in group meetings decision making in group meetings

-Tannenbaum-Tannenbaum

Meaning Meaning (Contd.)

“… “… refers to a process in which two or more refers to a process in which two or more

parties influence each other in making parties influence each other in making certain plans, policies & decisions…”certain plans, policies & decisions…”

-French-French

OBJECTIVES

Objectives may vary based on understanding and acceptance of this institution; by and large, the following four objectives are basic and essential

1. To improve the quality of work life and job 1. To improve the quality of work life and job satisfaction;satisfaction;

2. To improve efficiency and productivity of 2. To improve efficiency and productivity of enterprise;enterprise;

OBJECTIVES (Contd.)

3. To improve industrial relations and 3. To improve industrial relations and thereby promote a culture of harmony thereby promote a culture of harmony and understanding;and understanding;

4. To secure full recognition of the 4. To secure full recognition of the importance of human dignity in industry.importance of human dignity in industry.

SCOPE OF PARTICIPATION

The way in which workers can and do participate in management varies a great deal, and depends on:

a) Organizational circumstances (History; a) Organizational circumstances (History; Managerial style; culture; technology; Managerial style; culture; technology; market strategy, etc.)market strategy, etc.)

SCOPE OF PARTICIPATION ((Contd.)

b) Subjects or areas in which b) Subjects or areas in which participation is soughtparticipation is sought

c) Pattern of labour– management c) Pattern of labour– management relationsrelations

FORMS OF PARTICIPATION FORMS OF PARTICIPATION

Joint Consultation- UKJoint Consultation- UK

Workers Participation in ManagementWorkers Participation in Management

Co determination- GermanyCo determination- Germany

FORMS OF PARTICIPATION (FORMS OF PARTICIPATION (Contd.)

Industrial democracy- SwedenIndustrial democracy- Sweden

Workers Ownership & Self Workers Ownership & Self Management - Management -

ESOP -USAESOP -USA

BROAD DIMENSIONS

Participative arrangement involves three broad dimensions

• Economic

• Psychological • Social

EconomicEconomic

Implies the acceptance of the Implies the acceptance of the contribution of the worker to the contribution of the worker to the prosperity of the enterprise and prosperity of the enterprise and legitimacy of equitable sharing of legitimacy of equitable sharing of gains of increased prosperity.gains of increased prosperity.

PsychologicalPsychological

Implies recognition by employers of the Implies recognition by employers of the non-economic needs of the employees and non-economic needs of the employees and their innate desire to participate in the their innate desire to participate in the industry where they workindustry where they work

- Sense of importance / accomplishmentSense of importance / accomplishment

- Freedom and opportunity for expressionFreedom and opportunity for expression

- Sense of belongingSense of belonging

SocialSocial Modern industry, a social institution with Modern industry, a social institution with

interest of capital, employers, workers interest of capital, employers, workers and the community.and the community.

Understanding between employers and Understanding between employers and employees lead to better efforts and employees lead to better efforts and minimizes industrial strife. minimizes industrial strife.

Levels of ParticipationLevels of Participation

1.1. Shop-Floor level-Shop-Floor level- QCs, SGAs, Suggestion QCs, SGAs, Suggestion Scheme, Joint CouncilsScheme, Joint Councils

2.2. Plant Level-Plant Level- Collective Collective bargaining(?), Joint Councilbargaining(?), Joint Council

3.3. Enterprise Level- Enterprise Level- Worker DirectorWorker Director

Steps in Workers’ ParticipationSteps in Workers’ Participation

Informative & Associative ParticipationInformative & Associative Participation

Consultative ParticipationConsultative Participation

Administrative ParticipationAdministrative Participation

Decision Making ParticipationDecision Making Participation

WPM IN INDIAWPM IN INDIA

Formation of Works Committees Formation of Works Committees TISCO(1920), Govt. printing presses(1920), TISCO(1920), Govt. printing presses(1920), Carnatick Mills Madras(1922)Carnatick Mills Madras(1922)

Royal Commission on Labour (1929-31)- Royal Commission on Labour (1929-31)- Review of functioning of the Works Review of functioning of the Works Committee Committee

WPM IN INDIA (Contd.)WPM IN INDIA (Contd.)

Works Committees legislated under Works Committees legislated under Industrial Disputes Act, 1947Industrial Disputes Act, 1947

• To promote measures for securing and To promote measures for securing and preserving amity and good relations preserving amity and good relations between employers and workmenbetween employers and workmen

• To that end comment upon matters of To that end comment upon matters of common interest or concerncommon interest or concern

• To endeavour to compose any material To endeavour to compose any material difference of opinion between the employer difference of opinion between the employer and the workmen in respect of such mattersand the workmen in respect of such matters


Post Independence- Stress on Participative Management under Five Year Plans

Workers Participation in Management Scheme in TISCO (1956)

Industrial Policy Resolution 1956 – Visit of Tripartite Committee to UK, Sweden, France, Belgium, West Germany and Yugoslavia- Formation of Joint Management Councils


Indian Labour Conference (1959) – Clear demarcation of areas for participative decision making

Joint Consultative Machinery and Compulsory Arbitrations in Govt Deptts.

Constitutional Amendment- Incorporation of Article- 43A - 1975

Article 43 A:Article 43 A:

The state shall take steps, by suitable The state shall take steps, by suitable legislation or in any other way, to legislation or in any other way, to secure the participation of workers in secure the participation of workers in the management of undertakings, the management of undertakings, establishments or other organizations establishments or other organizations engaged in any industry engaged in any industry


Workers Participation in Public Sectors Banks- 1970

Introduction of new Scheme of Workers Participation (1975)- Manufacturing and Mining

Revised Schemes for Participation 1977 – Commercial and Service Orgns


Tripartite Committee on Workers Participation- 1977 (Janta Govt)

Revised Scheme in 1983 for Central PSUs

The Participation of Workers in Management Bill (1990)

Working Together in TATA STEEL

Agreement Introducing Scheme of Closer Association of Employees with Management Signed on 8th January 1956

THE THREE TIER SET-UP

Chairman Co-Chairman

Secretary

Joint Consultative Council of ManagementManagement Representatives Employees’ Representatives+ +

Occupational Health &

Environment Committee

Sports Coordination

advisory Committee

Joint Works

Quality Committee

Hospital Visiting

Committee

Joint Town & School

Visiting Committee

Joint Committee

of Employees

Trg. & Div.

C.D. & S.W. Advisory

Committee

Joint Amenities Committee

Joint Works Council

Management Representatives

Employees’ Representatives

Chairman Vice-

Chairman Secretary

+

Central Canteen

Managing Committee

General Safety

Committee

Safety Appliances Committee

Suggestion Box

Committee

Joint Departmental Council

Management Representatives – 2 to 10

Employees’ Representatives – 2 to 10

Suggestion Agenda &

Follow-up Sub-

Committee

Quality Training

Sub- Committee

Safety Health &

EnvironmentSub-

Committee

Welfare &Amenities

Sub-Committee

General StructureGeneral Structure

All committees are bipartite i.e. equal All committees are bipartite i.e. equal representation from Management and Unionrepresentation from Management and Union

The members are nominated by the The members are nominated by the Management and the UnionManagement and the Union

They hold their meetings as per their They hold their meetings as per their schedule, mostly once in a monthschedule, mostly once in a month

The Chairmanship and Vice-Chairmanship The Chairmanship and Vice-Chairmanship rotates between the management and the rotates between the management and the union every year in case of three main union every year in case of three main committees- JCCM, JWC, and JDCcommittees- JCCM, JWC, and JDC

Working together in Tata Steel

EVALUATION

Managements would wean away the workers – loyalty weakening the unions.

Managements may utilize the system to promote their own interests of production, productivity at the cost of employee health and welfare.

UNION’S RESPONSE

It erodes the vitality of the union. The union will cease to be a fighting organization for the cause of the workers.

The trade unions, as the organization of workers, should have equal say in major issues like economic, financial and administrative decisions

For industrial democracy to be successful trade union should play the role of an opposition

Trade Unions` endorse the views of pluralists

UNION`S RESPONSE (Contd.)

Managements` Perception

•Strong opposition to concept of workers` directors on the board

•Participation in true sense is too far fetched – Demands equality

•Lack of appreciation of business needs by the workers and their representatives – Sensitive information cannot be shared

•

Managements` Perception (Contd.)

• Participation by way of QCs/SGAs/Improvement Teams at shop floor level feasible

• Slows down decision making process – waste of managerial time

• Turns into grievance/demand raising forums – promotes populist measures

Managements` Perception (Contd.)

• Trade unions insist on controlling nominations – playing favorite

• Unsuitable for taking hard business decisions

WPM IN INDIA – SOME HURDLES

Parting with power – both by trade union and management

Multiplicity of unions: - Intra and Inter-Union rivalry

Lack of specific arrangement for sharing gains of participation

Imposition from above rather than initiative from within

Multiplicity of joint bodiesNo legislation for Union RecognitionLack of support from trade unions

Lack of education and training

State`s role in regulating IR – bipartism not encouraged

WPM IN INDIA – SOME HURDLES (Contd.)

WPM – CRITICAL SUCCESS FACTORS

•Mutual trust between management and union

•Willingness to share power

•Respect distinction between “interest” and “work” areas

•Enlightened management and strong responsible trade union

•Greater degree of openness on the part of management

•Regularity of meetings

•Faithful implementation of joint decisions

WPM – CRITICAL SUCCESS FACTORS (Contd.)

Worker's Participation in Management

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